Monday, November 3, 2014

Memories are made of this

Book Review from the November 2014 issue of the Socialist Standard

'Notes From the End of History: A Memoir of the Left in Wales'. Philip Bounds. Merlin.

Philip Bounds is an historian and journalist and this is his memoir about being attracted towards – and involved in – radical politics and organizations in Wales. It focuses mainly on the 1980s and 90s when he was growing up in a dynamic political environment punctuated by seminal events like the Miners’ Strike of 1984-5. In particular, he tries to answer the questions ‘Why has Marxism survived in spite of enduring so many defeats?’ and ‘What was it like to belong to the radical left at a time when Marxism was at its lowest ebb?’.

In some ways, he gives a more coherent answer to the latter than the former question though it is interesting that his political journey started out attending meetings of the SPGB as a teenager. His accounts are at times funny and nearly always insightful, a flavour being his vivid description of his first ever political meeting, addressed by late comrade Ron Cook:
‘I suppose he was the sort of socialist Orwell might have been too narrow-minded to appreciate. Grey haired, bespectacled and genial he came across like a university lecturer who had thrown it all up for a career in market gardening . . . I understood about a third of it but in my heart I embraced it all.’ (p.62-3)
Bounds says that despite his admiration for the SPGB’s vision of a peaceful, democratic socialist revolution (which has clearly stayed with him since) he moved on to associate with various of the more conventional organizations of the political left, saying of the SPGB that he was ‘thrilled by its internal culture but dismayed by its lack of activism’. He ended up – perhaps bizarrely – in the Communist Party of Great Britain and then one of its successor organizations after its demise, the Communist Party of Britain (CPB), the group still associated with the Morning Star newspaper. The political journey he took, via meetings of the SPGB, an interest in the punk band Crass and the anarchist group Class War is a fascinating one, though despite all his self-reflection in this book, it remains something of a puzzle that he chose to end up in the CPB. Indeed, it is very clear that he retains an affection not only for the style of politics of the SPGB but for the Party’s insistence on majority democratic revolution and hostility to the totalitarian dictatorships of the former Soviet Union, China and North Korea, etc. These are dictatorships for which members of the CPB are normally want to retain something of a political affection.

At times there is a sense that Bounds wishes to challenge his readers to move beyond the stock-in-trade reformism and sloganeering of the far left. For instance, towards the end of the book there is a moving and insightful piece about the occasion he accompanied a poverty-stricken member of the CPB around Swansea late one night, as she rooted through leftovers behind a luxury hotel in search of free food to be distributed amongst those on her estate:
‘With her gift for locating  sources of free food in a hostile city and her uncompromising insistence that the booty be shared out equally among her kinsfolk, she gestured towards a past in which no one thought of themselves as better than anyone else and everyone said ‘this is ours’ but never ‘this is mine’. In reminding us that communism had once been the natural order of things, she incarnated the hope that one day – at a much higher level of technology and culture and at a much lower level of superstition – we could do it all again.’ (p.186)
There is another way in which this book challenges the reader and pushes them further than they might otherwise have gone in their thinking. It is exceptionally well written and the prose flows beautifully. However, it is best to realise that amongst all this are often some very unfamiliar phrases and words. It is almost as if Bounds like to lull the reader into a false sense of security through the fluidity of his writing style before including something more challenging that will have readers running for the dictionary: ‘aetiology’, ‘exegetically gifted’, ‘subfusc’, ‘manichean intuitions’, ‘marmoreal’ and the wondrous ‘gallimaufry of soporific guests’ are but a random selection.

A highly entertaining and enjoyable memoir that deserves a wide audience, in Wales and beyond.

The Quest for Superprofits

The Cooking the Books Column from the November 2014 issue of the Socialist Standard

It can’t be often that Karl Marx gets a favourable mention in the Investors Chronicle. But he did in its 5 September issue. Chris Dillow, in an article discussing whether or not robotisation would be good for profits and dividends, quoted Marx as pointing out that new, more productive machines not only replace workers but also, as they spread, reduce the value of the older machines still in use. Part of the value of these machines is destroyed through what he called ‘moral depreciation’ (Capital, Vol 1, ch. 15, s.3b).

Dillow’s point was that this ‘moral depreciation’ reduced the value of the firm’s capital and so also of shares in it. There is another reason why an investor should steer clear of such firms. A firm with old machines will be less profitable as its machines won’t be able to produce its product as cheaply as its competitors who have installed the new machines.

Dillow claims that ‘profits come from monopoly power’ and, on this assumption, asks ‘will new technologies be a source of monopoly power or not?’ His answer: yes, at least for a while until the new technology becomes the norm.

In saying this he was pointing out that those firms that first employ a new technology will, because they can produce more cheaply than the average, be able to make an above average profit. This ‘superprofit’ attracts other firms to adopt the new technology, so bringing the average cost of production down and, with this, the end of the temporary superprofits of the innovating firms.

This is well explained by Ernst Mandel (despite his Trotskyism) in his Introduction to Marxist Economic Theory:
‘ … an enterprise or industrial sector with an above average level of productivity … economizes in its expenditure of social labour and therefore makes a surplus profit, that is to say, the difference between its costs and selling prices will be greater than the average profit. The pursuit of this surplus profit is, of course, the driving force behind the entire capitalist economy. Every capitalist enterprise is forced by competition to try to get greater profits, for this is the only way it can constantly improve its technology and labour productivity. Consequently all firms are forced to take this same direction, and this of course implies that what at one time was an above-average productivity winds up as the new average productivity, whereupon the surplus profit disappears. All the strategy of capitalist industry stems from this desire on the part of every enterprise to achieve a rate of productivity superior to the national average and thereby make a surplus profit, and this in turn provokes a movement which causes the surplus profit to disappear, by virtue of the trend for the average rate of labour productivity to rise continuously. ’ (

So it is not true that ‘profit comes from monopoly power’. Profits come from the surplus value produced by the working class. Monopoly power only enables a firm to draw more than average from this pool of surplus value. If monopoly power was the source of profits then if there was none, as in the ideal of so-called ‘perfect competition’, there would be no profits. Which is absurd. In that situation firms would still be making a profit, only the average with none making a superprofit.